The relation S + (T - G) = I + NX describing the equilibrium of an economy explicitly demonstrates
A) deficit spending by the government reduces either investment and/or net foreign investment.
B) deficit spending reduces private saving (assuming net foreign investment remains unchanged).
C) as private saving increases net foreign investment must decrease, exports decline.
D) as private saving increases the deficit must decline if investment decreases.
A
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Can the same principles that have been used in the study of advanced economies be used to study less developed economies as well? Explain your answer
What will be an ideal response?
Under a capitalist economic system,
a. the state owns all or most of the resources b. people are forced to work for a living c. resources are privately owned d. the government determines the allocation of resources e. prices eventually become unnecessary